Cohen & Steers

We would like to share with you our review and outlook for the preferred securities market as of May 31, 2012. For the month, the BofA Merrill Lynch Fixed Rate Preferred Index had a total return of 0.3% and the BofA Merrill Lynch Capital Securities Index returned 0.7%. Year to date, the indexes had total returns of +6.9% and +7.7%, respectively.

We would like to share with you our review and outlook for the U.S. large cap value market as of May 31, 2012. For the month, the Russell 1000 Value Index had a total return of 5.9%, compared with a total return of 6.0% for the S&P 500 Index. For the year to date, the Russell 1000 Value Index had a total return of +3.5%, compared with +5.2% for theS&P 500 Index.

We would like to share with you our review and outlook for theinternational real estate securities market as of May 31, 2012. The FTSE EPRA/NAREIT Developed ex-U.S. Real Estate Index had a total return of 8.0% for the month (net of dividendwithholding taxes) in U.S. dollars. By comparison, U.S. REITs returned 4.5% for the month, as measured by the FTSE NAREIT Equity REIT Index. Year to date, the indexes returned +7.3% and +8.8%, respectively.

We would like to share with you our review and outlook for the global real estate securities market as of May 31, 2012. The FTSE EPRA/NAREIT Developed Real Estate Index had a total return of 6.4% for the month (net of dividend withholding taxes) in U.S. dollars. Year to date, the index returned +7.9%.

Barring meaningful erosion in the economic backdrop, preferreds can continue to deliver attractive total returns due to generally improving credit fundamentals and historically wide credit spreads. In addition, favorable technicals should continue to support the asset class, as investor appetite for income is likely to remain strong and the overall size of the market could shrink as banks retire issues that may lose Tier 1 capital status. Preferreds offer an average yield close to 7%, which is significantly higher than other investment-grade alternatives such as corporate bonds and Treasurys.

Chinas economic growth is a key theme that drives our outlook for real asset categories. As the worlds dominant consumer of most commodities, China is the largest importer of iron ore, producer of steel and consumer of copper. About 65% of the worlds soybean production is imported to the region. Thus, we were encouraged by central bank easing in response to the first-quarter slowdown, as it seems to have orchestrated a soft landing. Should there be further policy actions, it could spur opportunities in a number of natural resource categories.

We have a generally favorable view of key office markets, including life sciences, technology and media, as well as NY offices broadly. We have decreased our allocation to apartments based on valuations and the prospects for more direct and indirect (housing rentals) competition. We continue to favor prime retail owners, while staying cautious toward health care properties, suburban offices and secondary retail.

In a global economy characterized by moderating inflation and tepid growth in developed markets, we believe emerging markets real estate securities offer attractive upside potential on a risk-adjusted basis. Policymakers in emerging economies have indicated increasing comfort with accommodative monetary policies, while domestic demand remains robust, creating a positive operating environment for both landlords and developers. On a relative value basis, we are finding more opportunities in residential developers, as we believe share prices remain depressed following their poor 2011 returns.

Valuations for many listed real estate companies have reached levels that are likely too low on a relative basis. We continue to closely monitor macroeconomic developments, and remain focused on companies that we think are best positioned to shield themselves from the adverse effects of deleveraging. Specifically, we generally favor high-quality companies with strong balance sheets and relatively low cash flow multiples. We continue to like London offices and the Berlin residential market.

North America fundamentals are on a slow but positive trajectory. European economic challenges keep us focused on high-quality names. Policy easing trends likely to benefit Asia Pacific.

European economic challenges keep us focused on high-quality names. Policy easing trends likely to benefit Asia Pacific.

The economic expansion is likely to continue, but at a pace that is modest both in absolute terms and relative to previous recoveries. Many stocks are still attractively valued, in our view, and they have the potential to advance in the coming months. At the same time we are watchful of global economic developments, particularly in Europe and the Middle East. A winding down of monetary stimulus (such as the Federal Reserves Operation Twist program) could create headwinds.

Given various risks to the domestic and global economies and generally modest inflation, monetary policy in the US will remain accommodative. With borrowing rates likely to remain low for an extended period, the yield advantage of leveraged closed-end funds will continue to draw investor interest. As a result, we see potential for the broad closed-end fund market to maintain historically narrow discounts, or even at times trade at premiums to NAV.

The predictable income, modest volatility and long-term growth potential of infrastructure securities continue to offer an attractive combination in the present market environment. We remain focused on subsectors we believe offer attractive relative valuations and compelling growth dynamics, such as pipelines, water and communications infrastructure. We are significantly underweight electric utilities given continued sector-specific fundamental and regulatory risks.

Europes attempt to rein in its fiscal imbalances has made for a negative macroeconomic backdrop, and we expect a moderate recession as a base-case scenario for the continent, marked by more severe contraction in the southern region. The recent LTRO facilities have prevented a severe credit crunch and collapse of the EU banking system. However, we take the view that this three-year program merely buys time to sort out the overleveraged balance sheets of most EU banks. It does not solve the long-term solvency crisis facing Greece and possibly Portugal.

Preferred securities continue to offer a compelling total return proposition. Treasury yields are at or near historic lows, and the Federal Reserve appears committed to holding interest rates steady for the foreseeable future. At the same time, with preferred yields near 7%, the yield spread between preferred securities and Treasuries remains far wider than its long-term average, and few other investments offer as much income.

A general moderation in inflation pressures is giving emerging market authorities more liberty to pursue policy stimulus, auguring well for domestic growth. We believe this will create opportunities for residential developers in various markets and we have increased our allocation to these companies.

Infrastructure securities predictable income, modest volatility and long-term growth potential have always attracted income-focused, risk-averse investors. If market volatility increases in the second half of the year, we expect these qualities will exert an even greater pull.

We have a very favorable view of specific office markets, including life sciences, technology and media, as well as New York offices broadly. We also continue to like prime retail and self storage owners, which are seeing very strong fundamentals. In contrast, we remain cautious toward health care properties and secondary retail. We have also reduced our allocation to apartment REITs on the margin following their strong run in 2011.

Europes attempt to rein in its fiscal imbalances has made for a negative macroeconomic backdrop, and we expect a moderate recession as a base-case scenario for the continent, marked by more severe contraction in the southern region. The recent LTRO facilities have prevented a severe credit crunch and collapse of the EU banking system. However, we take the view that this three-year program merely buys time to sort out the overleveraged balance sheets of most EU banks; it does not solve the long-term solvency crisis facing Greece and possibly Portugal.

. With borrowing rates likely to remain low for an extended period, we believe the yield advantage of leveraged closed-end funds will continue to draw investor interest. As a result, we see potential for the broad closed-end fund market to trade at even narrower discounts or even premiums to NAV. In addition, the recent success of new issues should allow the closed-end fund IPO window to remain open in 2012. At the present pace, we do not believe new supply will pressure pricing in the secondary market or impede discount narrowing.

We are encouraged by the recent trend of U.S. economic data showing measured improvement, although our expectation for GDP growth in 2012 remains modest at around 2%. With funding costs likely to remain low and demand showing signs of strengthening, we believe U.S. real estate fundamentals will continue to gradually improve in 2012, driven by growing demand from tenants and the scarcity of new supply in most markets. We believe these fundamentals will help support growth in asset values and dividend distributions for the U.S. public real estate sector.

Valuations are still attractive, in our view, if somewhat less so than at the beginning of the year, and volatility has subsided. We expect to see an increase in dividend payers; Apple has opened the door for other technology companies, a sector that has had a relatively low proportion of dividend-paying companies. We are also seeing solid dividend increases among industrials companies.

Europes difficult grapple with its fiscal crises has made for a negative macroeconomic backdrop, and we expect a moderate recession as a base-case scenario for the region. The recent LTRO facilities have prevented a severe credit crunch and collapse of the EU banking system. However, we take the view that this three-year program merely buys time to sort out the overleveraged balance sheets of most EU banks; it does not solve the long-term solvency crisis facing Greece and possibly Portugal.

Our near-term outlook for the U.S. economy and markets is increasingly favorable, as several of our long-term concerns appear to be easing. Economic indicators are strengthening, the danger of a eurozone collapse has receded and earnings reports for 2011 have been good. Valuations remain attractive, if somewhat less so than a few months ago, and investors are poised to put their considerable cash balances back to work. Cyclical names and sectors are most likely to lead the rally over the next few months.

We have a positive near-term outlook for infrastructure securities based on improving U.S. economic data and stabilizing credit conditions in Europe. But our optimism remains tempered by rising sovereign debt levels in Europe and the United States and a likely protracted period of economic hardship in the European periphery. Emerging markets are likely to be somewhat stronger, in our view, driven by better structural demand and monetary easing. For this reason, we have increased our investments in Brazil, China and Mexico.

Global real estate securities added to their year-to-date gains in February, although the pace of the rally moderated. Most markets in Europe and Asia Pacific continued to benefit from the retreat of macro risk concerns. U.S. REITs, which advanced in 2011 while other regions struggled, had a modest decline.

As emerging economies work through the late stages of a mid-cycle slowdown, policy markets are attempting to engineer soft landings as inflation pressures continue to moderate. Given the potential for better domestic growth in such an environment, we expect to take advantage of buying opportunities among residential developers. Our favored markets include Brazil, based on its natural resources, growing consumption trends and shareholder-friendly business environment. We particularly like the retail market, which continues to exhibit strong fundamentals.

We are encouraged by the recent trend of U.S. economic data showing measured improvement, including solid employment gains, as well as positive developments in Europe that have somewhat brightened the outlook for risk assets globally. With funding costs likely to remain low and demand showing signs of strengthening, we believe U.S. real estate fundamentals will continue to gradually improve in 2012, supported by a scarcity of new supply in most markets.

The U.S. economic picture has brightened since the fall of 2011, and we expect the trend to continue. We are also encouraged by progress in Europe, as economic austerity measures will likely weigh meaningfully on the regions growth. In this period of extended easy monetary policy by the Fed, we believe the yield advantage of leveraged closed-end funds will continue to draw investor interest. The success of recent IPOs should bode well for closed-end fund issuance in 2012, although we do not believe new supply will pressure pricing in the secondary market or impede discount narrowing.

International real estate securities added to their year-to-date gains in February, although the pace of the rally moderated. Most markets in Europe and Asia Pacific continued to benefit from the retreat of macro risk concerns. Europes difficult grapple with its fiscal crises has made for a negative macroeconomic backdrop, and we expect a moderate recession as a base-case scenario for the region. Given this environment, we seek to invest in companies that are best able to shield themselves from the most adverse effects of slowing economies and a general deleveraging.

We are encouraged by the trajectory of U.S. economic data and credit trends, as well as positive developments in Europe that have somewhat brightened the outlook for risk assets. However, we are closely monitoring various macro risks that could weigh on the global economic recovery, including a recession in Europe, high oil prices and slowing growth in China. Our portfolio remains more heavily weighted towards domestic issuers and is somewhat conservative relative to credit. That said, we continue to add to certain European issues and other higher-beta securities.

Preferred securities had their best month in more than a year in January, driven largely by significant improvement in European credit markets. Investors also gained encouragement from positive U.S. economic data, as well as improving credit trends for U.S. banks despite their lackluster profitability. In Europe, yields on bank and sovereign debt declined sharply in the wake of the European Central Banks long-term refinancing operation. The program reduced systemic risk in the financial system by improving European banks liquidity, while also giving banks the capacity to buy sovereign debt.

January was a quiet but strong month for equities. Investors moved away from defensive sectors and into somewhat riskier names as sentiment about the global economic outlook improved. There was no bad news from Europe. Indeed, global markets expressed relief that Europes banks now have access to additional liquidity through the Long-Term Refinancing Operations program (LTRO) announced in December. The U.S. economy continued to show self-sustaining growth that, while modest, allayed fears of recession.

International real estate securities rallied along with stocks broadly in January amid an easing of macro risk concerns. Positive developments in Europe significantly reduced the risk of a liquidity crisis, while data from China suggested the country was successfully navigating a soft landing to its economy. Meanwhile, the U.S. economy continued to show evidence of modest yet self-sustaining growth.

We have a positive near-term outlook for infrastructure securities based on improving U.S. economic data and stabilizing credit conditions in Europe. But there are still headwinds. The road to Europes recovery is unlikely to be smooth; and in the United States, state and local government debt may dampen growth. Emerging markets are likely to be somewhat stronger, in our view, driven by better structural demand. For this reason, we have increased our investments in Brazil, China and Mexico.

We are encouraged by the recent trend of U.S. economic data showing measured improvement, including steady employment gains. With funding costs remaining low and demand showing signs of strengthening, we believe U.S. real estate fundamentals will continue to gradually improve in 2012. Importantly, new supply remains scarce in most sectors, due in large part to banks continued reluctance to finance speculative development projects.

Recent initiatives to address the sovereign credit crisis appear to be having a meaningfully positive effect on credit conditions across Europe. Importantly, the ECBs long-term repurchase program has given banks vital breathing room to recapitalize. While we are cautiously optimistic, we remain vigilant to the potential risks and have a keen eye on Greece, which is engaged in ongoing negotiations with international lenders.

The U.S. economic picture has brightened meaningfully since December, and we expect the trend to continue, albeit at a modest pace. We are also encouraged by progress in Europe, but continue to monitor developments closely, as the issues there are complex and will take considerable time to resolve, while economic austerity measures are likely to weigh on growth. In this period of extended easy monetary policy by the Federal Reserve, we believe the yield advantage of leveraged closed-end funds will continue to draw investor interest, as demonstrated by the IPO in January.

We believe that recent developments within emerging real estate markets are consistent with our macro view. As emerging economies work through the late stages of a mid-cycle slowdown, policy markets are attempting to engineer soft landings as inflation pressures moderate. Given the potential for better domestic growth, we expect to take advantage of buying opportunities among residential developers (e.g., in Brazil), and have selectively been moving in that direction.

We are encouraged by the recent trend of U.S. economic data including steady employment gains. With funding costs likely to remain low and demand showing signs of strengthening, U.S. real estate fundamentals will continue to gradually improve. New supply remains scarce in most sectors, due in large part to banks continued reluctance to finance speculative development projects.The positive trajectory, however, is not without potential dangers. Economic growth remains at risk to global macro concerns, and our global investment team continues to closely monitor developments in Europe and China.

We continue to believe that the crisis in Europe is far from over; that the improving U.S. economic data, while encouraging, signal something well short of a robust recovery; and consequently, that the first half of 2012 remains highly uncertain. For these reasons, we still expect (1) more intervention by politicians and central bankers, (2) continued historically low interest rates in the US, (3) modestly positive U.S. economic data, (4) high but slowing growth in China and emerging markets, (5) short-term measures to address Europes long-term debt crisis.. and others.

In terms of preferreds broad performance potential, we note that bond yields are at or near historic lows, and that the Federal Reserve is likely to hold interest rates steady until 2013. In such an environment, the income offered by preferreds (78% or more) will be hard to come by, likely resulting in good investor demand in the year ahead. At the same time, the high income these securities produce is also likely to continue to factor meaningfully into their total return and dampen returns volatility.

We remain materially underweight Europe and Japan, and overweight Asia Pacific (ex-Japan). We have selective allocations to well-established companies in emerging markets whose business models are positioned to benefit from secular growth in consumer spending among emerging middle classes. We are overweight high-quality retail and offices in major city centers globally, where tenant demand has been more resilient and supply more constrained. Finally, we have allocations in property sectors and geographies where stronger cyclical recovery is emerging as a driver of outsized cash flow growth.

Our macro outlook has turned more positive given the global shift toward monetary easing as well as U.S. economic data confirming steadily improving growth. However, we expect the fiscal crisis plaguing Europe to remain an overhang, as the region is likely heading into recession, making a long-term resolution increasingly difficult. Despite these challenges, we believe fundamentals for global real estate securities will continue to improve broadly, with the lack of new supply coupling with growing demand and effective expense reduction to generate meaningful cash flow growth.

We are entering 2012 with a positive outlook for infrastructure securities based on better-than-expected U.S. economic data and credit conditions in Europe that show some signs of stabilizing. Even so, we recognize that it will take time for the global economy to achieve sustained growth. We will continue to monitor global monetary policies, having already seen the beginning of the next easing cycle. Despite the fact that the sector still carries meaningful political and regulatory risk, we believe infrastructure companies should perform well in 201

Our global macro outlook has turned positive given the shift toward monetary easing as well as U.S. economic data steadily improving growth. However, Europes central role in fiscal crises has made for a difficult backdrop in the region. We have begun to envision a recession in Europe as a base-case scenario. Given this, we seek to invest in companies that are best able to shield themselves from the most adverse effects of a slowing economy. Broadly speaking, opportunities to invest in companies with good balance sheets that are trading at meaningful discounts to their property values.

We expect GDP growth of between 1% and 2% in 2012, with modest but steady gains in employment. This should support continued gradual improvement in real estate fundamentals, given low new supply in most sectors. In this environment, we seek to identity markets with above-average employment (and income) trends. And in an election year that should present opportunities and risks, we will monitor how the results might affect employment in the financial and health care industries, and the Washington, D.C. market generally.

The U.S. economic picture has brightened in recent weeks, a positive for equities and credit markets, and we expect slow sustained growth. However, Europe remains a risk. While recent fiscal, political and central bank initiatives to address the credit crisis in Europe are encouraging, the political landscape remains uncertain, and economic austerity measures will weigh on growth. With interest rates likely to remain near historical lows for an extended period, we believe that attractive spreads should continue to benefit the income-generating potential of leveraged closed-end funds.

Over the long term, we believe emerging market real estate securities are well positioned to benefit from secular trends such as expanding urban centers and the rise of the consumer class. In the near term, however, we expect volatility to continue as markets grapple with uncertainty about Europe and further deceleration in economic growth. In this challenging market environment, we continue to favor commercial landlords over developers.

Our global macro view has turned more positive given the recent shift toward monetary easing in Asia Pacific and emerging markets, as well as U.S. economic data confirming slow but positive growth. However, we expect Europe to struggle in the intermediate term as austerity measures introduced by a variety of governments continue to hinder growth.

Europe appears headed for recession, which would have at least some negative effect on the U.S. economy. However, that is a scenario we have incorporated into our models, and we continue to expect slow but steady domestic growth with gradually improving fundamentals for U.S. commercial real estate. Our estimates of net asset value are largely conservative. While transactional information has been relatively light, it has provided confirmation to our numbers. We believe acquisition activity could pick up as 2012 progresses, especially as REITs ability to raise capital remains in force.

Emerging markets real estate securities had a negative return in November following an exceptionally strong October. Worries about the global economy and Europe continued to weigh on equities broadly, while signs of slowing growth in China were of particular concern to developing countries. A sharp rally in the last few days offset some of the decline, as China cut its reserve requirement ratio for the first time in three years and central banks announced a coordinated effort to provide much-needed liquidity to European banks.

Our macro outlook has turned more positive given the recent shift toward monetary easing in Asia Pacific and emerging markets, as well as U.S. economic data confirming slow but positive growth. However, Europe is likely to remain an overhang, as the region appears to be heading into recession, making a resolution to its debt crisis considerably more difficult.

Our macro outlook has turned more positive given the recent shift toward monetary easing in Asia Pacific and emerging markets, as well as U.S. economic data confirming slow but positive growth. However, Europe is likely to remain an overhang, as the region appears to be heading into recession, making a resolution to its debt crisis considerably more difficult.

We expect the markets to do better through year-end (although most of November gave us pause), but the outlook for the first half of 2012 remains wildly uncertain. Modestly improving U.S. economic data have not fully offset the European debt quagmire that is now inhibiting growth around the world. Recent economic news from the continent has been decidedly weaker, and is beginning to show up in data from Germany, the regions economic juggernaut and stalwart defender of a unified Europe.

With interest rates likely to remain near historical lows for an extended period, we believe the high income potential of preferred securities (which currently offer nearly twice the income of corporate bonds) will continue to attract investors. Not only is high income in high demand, but it also provides a meaningful buffer to the total return profile of the asset class in this volatile environment.

With interest rates likely to remain near historical lows for an extended period, we believe that attractive spreads should continue to benefit the income-generating potential of leveraged closed-end funds. As for new closed-end fund issuances, we believe the IPO window will remain open, but not to the degree that could pressure pricing in the secondary market or impede discount narrowing as investors bid for above-average income.

The investment environment is likely to continue to be characterized by heightened risk, including political risk as governments institute austerity measures and posture ahead of upcoming elections. The delay in the Keystone XL pipeline in the United States and Canada and the challenge faced by Central Japan Railway in confirming government financial assistance underscore these risks. Positive fundamental trends do continue, such as in the North American pipeline space, where companies continue to benefit from the need to reshape the regions energy grid.

Emerging market real estate stocks were hit hard in the risk-averse environment that defined the third quarter. The asset class underperformed its developed-market counterpart, which also had a double-digit decline amid slowing global growth and concerns regarding Europes unresolved sovereign debt crisis. Slowing global growth is taking some pressure off emerging markets in terms of inflation containment. A trend of policy easing appears to be underway. This could result in improved performance for recently problematic sectors. We have been incrementally adding to such sectors.

European real estate securities fell sharply in the risk-averse environment that defined the third quarter. The region underperformed North America and Asia Pacific, which also had double-digit declines amid slowing global growth and concerns regarding Europes unresolved sovereign debt problem. We believe the European financial system is in need of substantial equity recapitalization. Until banks are able to achieve this, corporate financing in Europe, combined with austerity measures introduced by a variety of governments, is likely to remain restrictive.

Asia Pacific real estate securities declined sharply in the third quarter, a negative and volatile period for stocks broadly. Markets were roiled by reduced global growth expectations and intensified European sovereign debt concerns. Economic growth throughout most of Asia Pacific remains relatively strong, driven in large part by demand from China. The regions property markets have encountered policy headwinds, but the outlook for slower global growth has eased inflationary concerns.

In a volatile quarter for global capital markets, U.S. closed-end funds tumbled as investors factored in meaningfully lower expectations for global economic growth. We are expectating a challenging economic environment over the near term, including an increased likelihood that Europeand possibly even the U.S.may slip into recession. As such, we have moderated our allocation to equity funds, while increasing our investments in fixed income and gold. We believe we are well-positioned, with the flexibility to take advantage of price breaks that emerge across asset classes.

This is our review and outlook for the preferred securities market as of September 30, 2011. For the quarter, the BofA Merrill Lynch Fixed Rate Preferred Index had a total return of 3.1% and the BofA Merrill Lynch Capital Securities Index returned 6.2%. Year to date, the indexes had total returns of +2.1% and 2.4%. In general, we prefer nonfinancial sectors, such as utilities, pipelines, real estate, telecommunications and media. That said, we are also seeing new opportunities in U.S. bank trust preferred securities, many of which reached attractive levels following the recent selloff.

Our outlook for the U.S. economy remains cautious in the face of Europes possible slide back into recession and slowing growth in China. Conflicting economic data are likely to persist and contribute to market volatility. On a positive note, earnings remain decent and dividend payers are well positioned to raise payouts, which should attract investors, as yield is becoming a favored strategy. However, stock buybacks have become a competing use for excess cash once again, as evidenced by Berkshire Hathaways announcement.

We would like to share with you our review and outlook for the international real estate securities markets as of September 30, 2011. International real estate securities fell sharply in the third quarter, along with equities broadly, as risk factors escalated. All major regions had double-digit declines amid slowing growth in the U.S. and China and intensified concerns regarding Europes sovereign debt problem.

Global infrastructure stocks are in a position to perform well in the current economic environment as historically, their cash flows have been relatively resilient in the face of slowing economic growth. On a regional basis, we remain overweight the U.S. and underweight Europe, given the high degree of uncertainty regarding a solution to sovereign debt issues and the long-term impact of austerity on the regions growth outlook. Our Asia Pacific outlook is mixed: our investments in Japan remain defensive, and we are cautious on Australia, given the potential impact of a slowdown in China.

We would like to share with you our review and outlook for the global real estate securities market as of September 30, 2011. The FTSE EPRA/NAREIT Developed Real Estate Index had a total return of 17.4% for the quarter (net of dividend withholding taxes) in U.S. dollars, and 12.7% for the year to date. Global real estate securities fell sharply in the third quarter, along with equities broadly, as risk factors escalated. All major regions had double-digit declines amid slowing growth in the U.S. and China and intensified concerns regarding Europes sovereign debt problem.

We would like to share with you our review and outlook for the U.S. real estate securities market as of September 30, 2011. The FTSE NAREIT Equity REIT Index had a total return of 14.7% for the quarter, compared with a 13.9% return for the S&P 500 Index. Year to date, the indexes had total returns of 6.0% and 8.7%, respectively. From a sector perspective, we believe apartment REITs will continue to benefit from positive market fundamentals despite a weak job market. We remain underweight in office REITs, but continue to see attractive opportunities in urban markets.